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Transcript of Investor Relations | page 1 Investor Relations | 1 Institutional Presentation March, 2007 Unibanco...
Investor Relations | page 1 Investor Relations | 1
Institutional Presentation March, 2007
Unibanco and Unibanco Holdings, S.A.
Investor Relations
Investor Relations | page 2 Investor Relations | 2
Overview of Unibanco
Investor Relations
Investor Relations | page 3 Investor Relations | 3
Highlights
*In 1Q07
Controlled by the Moreira Salles group
Publicly traded at Bovespa (Brazil) and NYSE
Level I Corporate Governance on the Bovespa
Level III ADR on the NYSE and a member of IBOVESPA
Very liquid stock: R$48.5 mln / US$24.1 mln ADTV* at Bovespa R$171.8 / US$85.5 mln ADTV* at NYSE
Financial statements in US GAAP since 1997
Investor Relations | page 4 Investor Relations | 4
• Offers investment products via Unibanco Asset Management to individuals and institutional investors and covers high net worth individuals, in the private banking segment
• Total assets under management: R$45.6 billion
• 2nd place in Private Banking (Anbid), with a 9.5% market share as of March, 2007
A Snapshot of UnibancoAs of March 2007
• Balanced business mix
• Aggressive expansion in the retail segment
• Benchmark in consumer finance and wholesale business
• Serves individuals and SMEs with annual revenues lower than R$150 million
• More than 24 million clients
• Leading Consumer Finance franchise
• Improvement of the credit card portfolio, which posted a 24% growth over the past 12 months
• Payroll linked loans portfolio presented a growth of 64.5% when compared to March 2006
Retail and Consumer Credit
Wholesale
• Full coverage of more than 2,000 corporations with annual revenues greater than R$150 million, in addition to institutional investors in Brazil and internationally
• Investment Banking: M&A, Capital Markets & Project Finance
• The Wholesale loan portfolio reached R$19,671, up 19.9% over the past 12 months
Wealth Management
CROSS SELLING
• Joint venture with AIG
• Individuals and corporate: life, auto, assets, disability, pension funds and annuities
• Unibanco AIG operational results: 13% up from 1Q06
• Unibanco Insurance and Pension Plans placed 4th in the ranking of private pension plans published by Susep, with a 9.1% market share as of February, 2007
Insurance & Annuity – Unibanco AIG
Investor Relations | page 5 Investor Relations | 5
Wholesale and Wealth Management
Audit Committee
Gabriel Jorge FerreiraChairman
Members
Board of Directors
Pedro MalanChairman
Pedro Moreira SallesVice-Chairman
Board Members
CEO
Pedro Moreira Salles
Retail
Organizational Structure
Prominent Board Members Independent Audit Committee
Legal and Tax Planning, Control, Operations and IR
TreasuryInsurance and PensionsHR and Communication
Risk, Compliance and Operational Efficiency
Guilherme A. Ferreira
Israel Vainboim
Pedro Bodin
Armínio Fraga
Joaquim F. Castro Neto
João DionisioFrancisco Pinto
Israel VainboimRogério Calderón
Eduardo A. GuimarãesGuy Almeida Andrade
Marcos LisboaGeraldo TravagliaClaudia Politanski
Demosthenes Madureira
Márcio Schettini José Rudge Daniel Gleizer
Investor Relations | page 6 Investor Relations | 6
Over 80 years of history to become one of the leading full service banks in Brazil
Timeline
Investor Relations | page 7 Investor Relations | 7
Segmentation and Distribution
Client Focus Nationwide Distribution(As of March 2007)
More than 17 thousand points of sale
Branches
NorthNortheast
Southeast
South
Mid-West
1169
701
122
44
Brazil 947
Corp. Site Branches
255
1,398957
5,6142,857
Points of Sale
11,081
9
7337
412140
Stores
671
Mid-West 46
Southeast 434South 240
Stores
Brazil 720
Consumer Finance Companies
NorthNortheast
Southeast
South
Mid-West
Brazil
NorthNortheast
Southeast
South
Mid-West
Brazil
NorthNortheast
Southeast
South
Mid-West
Brazil
NorthNortheast
Southeast
South
Mid-West
BrazilSmall Business
Large Companies
Upper Middle Market
Private Bank
UniClass Segment
Exclusive Segment
Corporate Individuals
Lower Middle Market
Wholesale Retail Private Banking
835
28198
37
306
95442
1552.363
293
3.348
Investor Relations | page 8 Investor Relations | 8
Client Base In Millions of Clients
Consumer Finance
Universal Bank
Joint-Ventures
with Retailers
Dec-03 Dec-04 Dec-05 Mar-06 Dec-06 Mar-07
24.1
6.4
5.0
5.0
1.8
18.2
6.8
5.3
5.3
3.0
20.4
4.3
7.1
4.7
23.8
7.7
4.0
4.1
6.0
14.1
7.1
5.2
7.8
4.0
7.0
5.2
5.6
3.2
21.0
Investor Relations | page 9 Investor Relations | 9
Retail Business Model
100% Unibanco Joint-Ventures Alliances
Investor Relations | page 10 Investor Relations | 10
Individuals
Car Loans
3.6
9.0
18.4
34.0
Corporate 2.7 20.1
Payroll Loans 64.520.9
Total Portfolio
5.1 16.0
Loan Portfolio Growth
39,684
23,891
15,793
Credit Cards
Consumer Finance Companies
Mar-06Dec-06Mar-07
18,319 17,425
28,682 27,936
47,001 45,361
1,4962,461 2,036
3,9874,947 5,070
2,9002,715 2,808
24.1-2.4
-6.4-3.3
R$ Millions
1,396Mortgages 1,545 1,476 10.74.7
SMEs 7,4889,011 8,515 20.35.8
Large Corporate 16,40319,671 19,421 19.91.3
Portfolio highlights
3,7395,009 4,594
Quarter %
12 months %
Investor Relations | page 11 Investor Relations | 11
64.5%
Dec-06 Mar-07
20.9%
40.8%
Mar-06
Acquired portfolioOwn portfolio
R$ Millions
1,1731,4966.2% 1,246
1,021
1,215
475
2,036
863
2,461
Payroll Loans
Investor Relations | page 12 Investor Relations | 12
Mortgage
Construction Loans Construction Loans (Plano Empresário)(Plano Empresário)
Mortgage FinancingMortgage Financing
Letter of Credit program
Participation on the equity
side of residencial
developments
Construction Loans to
Developers aiming the final
buyer’s mortgage
Sistema FácilSistema Fácil
Plano ÚnicoPlano Único
Presence in the sector:
Fidelization/Cross-selling
Main actions in 2007:
• Improvement of credit approval process
(credit analysis in less than 30 minutes)
• Improvement of customer services (Unibanco
takes care of all the necessary documents)(1)
• Closer relationship with developers and
brokers through agreements (Rede Secovi,
Lopes)
Unibanco is preparing itself for the development of this market in
Brazil
(1) Valid for the cities of São Paulo, Rio de janeiro, Belo Horizonte and Recife
Investor Relations | page 13 Investor Relations | 13
Mar-06 Mar-07
3,739
5,009
+34.0%
1Q06 = 100
193
123
170
116
Auto Financing
1Q07 1Q07
MarketMarket
Cars + Trucks & Buses Loans
Focus: New Cars (Financed Units) Focus: New Trucks & Buses (Financed Units)
R$ Millions
1Q06 = 100
Investor Relations | page 14 Investor Relations | 14
+24.1%
3,987
4,947
Mar-06 Mar-07
Credit Cards
+31.2%
4,172
5,474
R$ MillionsR$ Millions
Billings (Unicard + Hipercard)Loan Portfolio (Unicard + Hipercard)
Number of cards (In millions)
Total Cards
8
Credit Cards
22
30
5.0
10.0
15.0
20.0
25.0
Private Label cards
30.0
Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Mar-07
1Q06 1Q07
Investor Relations | page 15 Investor Relations | 15
Financial Performance
Investor Relations
Investor Relations | page 16 Investor Relations | 16
21.0%
Annualized ROAE (%) Stockholders’ Equity (R$ Bln)
Net Income + 11.7%
+ 11.7%
1Q07/1Q061Q07
581
938Operating Income
Performance
8.416.1%
7.4
25.1%
10.3
R$ Millions
1Q071Q051Q04 1Q06
9.5
24.0%
Investor Relations | page 17 Investor Relations | 17
Destaques
5.4% Retail portfolio growth in 1Q07:
- Payroll loans: 20.9% (64.5% YoY)
- Car loans: 9.0% (34.0% YoY)
- SMEs: 5.8% (20.3% YoY)
Loan Portfolio
18.4% reduction in provision for loan losses, 1Q07 vs 1Q06 (down 1.7% QoQ)
Better ratio of D-H portfolio over total loans (6.2% vis-à-vis 8.0% in March 2006)
Higher E-H portfolio coverage ratio, 116%, compared to 113% in March 2006
Asset Quality Improvement
Stocks Unibanco ADTV(1) (Bovespa + NYSE): R$220 million in 1Q07 versus R$179
million in 1Q06, a 23% increase
Market Capitalization(2): R$30.2 billion
OperationalEfficiency
Personnel and Administrative expenses:
- 7.8% reduction compared to 4Q06
- 4.2% up in 12 months
- 1.8% up in 12 months for companies under Unibanco’s direct management
Highlights
(1) Average Daily Trading Volume
(2) As of May 9th, 2007
Investor Relations | page 18 Investor Relations | 18
1Q071Q06
1Q06 = 100
Performance – 1Q07 versus 1Q06
100
LoanPortfolio
118
100
AdministrativeExpenses
104100
OperatingIncome
112
100
Net Income
112
100
Provision for Loan Losses
82100
Core Deposits
133
Investor Relations | page 19 Investor Relations | 19
1Q074Q06
Performance – 1Q07 versus 4Q06
100
LoanPortfolio
104
100
AdministrativeExpenses
92100
OperatingIncome
102 100 101
100
Provision for Loan Losses
98100
Core Deposits
105
Net Income
1Q06 = 100
Investor Relations | page 20 Investor Relations | 20
Income Statement Summary
R$ Millions
1,884 1,957
869 886
(1,384) (1,501)
938 917
581 576
1,716
839
(1,328)
840
520
1Q06
Gross Profit from Financial Intermediation
4Q06
(524) (533) (642)
2,408 2,490 2,358
1Q07
Personnel and Administrative Expenses
Fees from Services Rendered
Provisions for Loan Losses
Net Profit from Financial Intermediation
Operating Income
Net Income
Investor Relations | page 21 Investor Relations | 21
Financial Indicators
Net Profit from Financial Intermediation
Total Assets Loan Portfolio
Earnings per Share (R$)
103,709
93,689
98,217
Mar-06 Dec-06
45,361
39,684
1,902
1,716
1Q06 2Q06 3Q06 4Q06
1,724
1Q07
101,999
Mar-07
41,929
0.21
0.19
0.20
R$ Millions
Mar-06 Jun-06 Dec-06 Mar-07
43,323
0.20
Sep-06 Sep-06Jun-06
115,191
1,9571,884
1Q06 2Q06 3Q06 4Q06 1Q07
0.21
47,001
Investor Relations | page 22 Investor Relations | 22
18.4%
Dec-06 Mar-07
3.6%
5.4%
Mar-06
Wholesale
Retail
R$ Millions
39,684
45,361
1.3%
25,940
23,281
19,42116,403
47,001
27,330
19,671
Loan Portfolio Growth
Brazilian Financial System
13.8%18.4%3.6%
20.7%21.0%3.3%
2006 Quarter 12 months
Investor Relations | page 23 Investor Relations | 23
1Q06 1Q07
9.3%10.9%
7.9%
Financial Margin After Provision Financial Margin
23.3%
21.8%
27.2%27.9%
Provision for Loan Losses / Financial Margin
-730 b.p.
1Q072Q06 3Q061Q06
21.4%
4Q06
16.5%
12.75%
Selic Rate
7.2%
Financial Margin
29.1%
4Q05
Investor Relations | page 24 Investor Relations | 24
6.2%6.4%8.0%116%115%
113%
92%
69%
Mar-06 Dec-06 Mar-07
Mar-06 Dec-06 Mar-07Mar-06 Dec-06 Mar-07
Asset Quality
D-H Portfolio / Loan Portfolio
Coverage E-H Portfolio
Coverage D-H Portfolio
92%
Investor Relations | page 25 Investor Relations | 25
3,963
6,757
5,452
16,172
29,631
89,583
45,803
43,780
45%
Demand Deposits
Savings Deposits
Core Deposits CDs
Core Deposits
Time Deposits + Debentures
Assets Under Management (B)
Total Deposits + Debentures + AUM (A+B)
Total Deposits + Debentures (A)
Core Deposits / Total Deposits
R$ Millions
5,248
3,604
28,725
39,924
35%
Mar-07 Dec-06 Mar-06
Deposits and Assets under Management
4,014
7,510
5,478
45,606
17,002
29,430
92,038
46,432
49%
3,959
12,811
81,460
41,536
Investor Relations | page 26 Investor Relations | 26
4.2%
4Q06 1Q07
-7.8%
-10.6%
1Q06
AdministrativePersonnel
R$ Millions
5581,328 -3.0
541535
843793
1,501
943
1,384
Personnel and Administrative Expenses
Total Expenses
Investor Relations | page 27 Investor Relations | 27
Fee Income
R$ Millions
Total
Banking fees and commissions
Credit Cards – own cards(1)
Assets under management
4Q061Q07 1Q06
Subtotal
Redecard
Other fees
460510
82
886
520
76
869
135121
6262
824807
97
839
102
88
751
9790 92
(1) Hipercard + Unicard
Investor Relations | page 28 Investor Relations | 28
Revenues
R$ Millions
Efficiency Ratio Expenses
47.5%
53.7%
1Q05 1Q061Q04 1Q07
1,921
1,143
2,212
1,187
2,797
1,328
Efficiency Ratio
59.5%
2,940
1,501
4Q06
51.1%
1,384
48.8%
2,835
Investor Relations | page 29 Investor Relations | 29
903
551
111
(67)
31
79
Net premiums written
Premiums earned
Industrial result
Personnel and administrative expenses
Operating income
Net Income
R$ Millions
849
474
79
(58)
30
92
1Q07 4Q06 1Q06
Insurance and Pension Plans
1,142
625
106
(63)
35
69
85Financial & equity result 8253
Income Statement Summary
8,298
44.6%
Technical Reserves
Loss Ratio
7,304
55.6%
8,730
47.3%
94.4%Combined Ratio 93.7%94.4%
Investor Relations | page 30 Investor Relations | 30
Stocks
Unibanco was the first Brazilian
bank to be listed on the New
York Stock Exchange (NYSE)
In 2007, Unibanco celebrates its
10th anniversary of listing in the
american market
Investor Relations | page 31 Investor Relations | 31
On April 27th, 2007, Moody’s Investors Service upgraded Unibanco’s Financial
Strength rating to B- (B minus) from C-, representing a 3-notch upgrade The new rating is the highest assigned in the country, and places Unibanco among
the top Brazilian banks in Financial Strength. Only 2 other financial institutions
obtained the same rating
Unibanco's Rating is upgraded
Ratings
Fitch Ratings upgraded, on May 14th, 2007, Unibanco's rating to BBB-, which
represents an investment grade. The rating refers to the long-term foreign currency IDR (Issuer Defaut Rating) and is
the highest among Brazilian Financial Institutions. This current level is also higher
than the rating assigned to Brazil, BB+.
Investor Relations | page 32 Investor Relations | 32
Shareholders’ Structure
Investor Relations
Investor Relations | page 33 Investor Relations | 33
Moreira Salles Group
Float Units + GDS
Others
Total
513,068
1,075,410
40,668
1,629,146
Unibanco Holdings
Float Units + GDS
Others
Total
1,629,146
1,075,410
98,515
2,803,071
18%
38%
2%
58%
58%
38%
4%
100%
PNUnibanco Holdings
PN Unibanco
+ UNITs76.7%
Shareholders’ Structure
% of Unibanco shares
% of Unibanco shares
Thousands of Shares
1 GDS=10 Units
Investor Relations | page 34 Investor Relations | 34
Ratings
Investor Relations
Investor Relations | page 35 Investor Relations | 35
Unibanco Ratings
Fitch Ratings
Unibanco
BB+
Foreign Currency
Brazil
Long Term
Short Term
BBB-
B
F3
BB+
Local Currency
Brazil
Long Term
Short Term
-
Unibanco BBB- F3
Standard and Poor’s
Unibanco
BB+
Foreign Currency
Brazil
Long Term
Short Term
BB+
B
B
BBB
Local Currency
Brazil
Long Term
Short Term
A-3
Unibanco BB+ B
Moody’s
Long TermDebt
Long Term Deposits
Short Term Deposits
Financial Strength
Unibanco Baa3(1) NP B-Ba3
Brazil Ba2 Ba3 NP -
Global Scale: Foreign Currency Global Scale: Local Currency
Long Term Deposits
Short Term Deposits
Unibanco P-1A1
Brazil A1 P-1
(1) The Baa3 rating was attributed to the MTN Programme (Medium Term Note Programme) of Unibanco and also to the notes indexed to the IGP-M (General Market Price Index) and payable in US dollars issued by Unibanco Grand Cayman Branch.
Investor Relations | page 36 Investor Relations | 36
Unibanco and Unibanco Holdings, S.A.
This presentation contains forward-looking statements regarding Unibanco, its subsidiaries and affiliates - anticipated synergies, growth plans, projected results and future strategies. Although these forward-looking statements reflect management’s good faith beliefs, they involve known and unknown risks and uncertainties that may cause the Company’s actual results or outcomes to be materially different from those anticipated and discussed herein. These risks and uncertainties include, but are not limited to our ability to realize the amount of the projected synergies and the timetable projected, as well as economic, competitive, governmental and technological factors affecting Unibanco’s operations, Junkets, products and prices, and other factors detailed in Unibanco’s filings with the Securities and Exchange Commission which readers are urged to read carefully in assessing the forward-looking statements contained herein. Unibanco undertakes in duty to update any of the projections contained herein.
Investor Relationsphone: 5511-3584-1980
fax: 5511-3584-1585email: [email protected]
site: www.ir.unibanco.com